Online Publishers Try Reducing Ads to Boost Revenue

LittleThings and Dotdash say they’re taking a ‘less is
more’ approach with ads across their sites

By Jack Marshall July 13, 2017 6:01 a.m. ET

For online publishers, more advertising typically means
more revenue. It’s why websites are often crammed full of flashing banners,
auto-playing videos, content-blocking overlays and widgets recommending
sponsored story links.

But some publishers say they’re now taking a “less is
more” approach when it comes to placing ads across their sites. Stripping out
irritating ad formats and limiting the number of ads forced on visitors can
actually result in more engaged consumers and ultimately increased ad revenue,
they say.

In early 2016, for example, female-focused publisher
LittleThings set a challenge for itself: to remove at least one form of
advertising from its site every quarter, but without sacrificing revenue.

Over the course of the next year, it proceeded to remove
from its site clickbait-heavy content recommendation ads, interstitial ads that
pop up and cover users’ screens, and autoplay video ads. Now the site mostly
relies on just display ads, user-initiated video ads and sponsored content.

The result: There are now fewer ads on each page, and the
website generates less revenue from each individual page that users view. But
overall ad revenue has increased.

“Users view more pages, share more content and are
generally more engaged,” said Justin Festa, chief digital officer at
LittleThings. He said revenue generated from each user’s session grew 38% in
June, compared with a year earlier.

What’s more, having fewer ads on each page actually
helped boost the performance and value of the advertising that remained, said
Mr. Festa. The ads were more likely to be seen and clicked on because there was
less clutter, he explained.

Publishers’ moves to cut out annoying ads could also be
driven by more than just improving the user experience.

Aggressive and spammy ad tactics have helped drive an
increase in consumer adoption of ad-blocking technologies in recent years, some
industry observers say. Publishers may also be trying to get ahead of Google’s
plans to introduce an ad “filter” to its popular Chrome web browser early next
year, which could block interstitials, autoplay video ads and other formats
from loading by default.

Online publisher Dotdash said it’s taking an approach
similar to LittleThings across its portfolio of six niche-focused sites, like
Verywell and Lifewire, which were carved out from what was once About.com.

Squeezing as many ads as possible onto every page is a
shortsighted strategy, according to Dotdash Chief Executive Neil Vogel. The
company has therefore stripped out content recommendation ads from its pages
and autoplay video ads from within its articles, with the belief that a better
user experience will help drive greater revenue in the long run.

“We are leaving money on the table on an individual visit
basis but, overall, being thoughtful about things like this we think is a
material driver of the growth of our brands,” Mr. Vogel said.

Mr. Vogel said the company stopped using content
recommendation ads from third-party companies primarily because of concerns
about the types of content they placed on its properties. “Users need to trust
us with health, finance, travel advice. We didn’t think it was a good fit,” he
said. Mr. Vogel didn’t say which company Dotdash had previously worked with for
content recommendation ads.

Adam Singolda, CEO of content recommendation network
Taboola, said he agrees that webpages have become more cluttered in recent
years, describing them as “at times as chaotic and disorienting” as “Times
Square signage.”

That’s largely why his company has been working on new
tools such as its “Feed” product, he said, which is designed to help web
publishers offer a more “streamlined” user experience similar to the ones
they’ve come to expect from social networking apps.

Yaron Galai, CEO of rival content recommendation service
Outbrain, said publishers aren’t stripping its widgets from their pages. “I’m
not aware of any serious publisher we work with at Outbrain who’s considering
removing content recommendations. Discovery is fundamental to their sites and
business, just like a search box is,” he said.

Still, content recommendation ads and autoplay video ads
have a reputation for surfacing ad experiences of questionable quality. Then,
why do publishers continue to use them?

The answer is simple: Providers of those ads pay
publishers millions of dollars a month in some instances, and often on a
guaranteed basis. It’s a reliable source of revenue at a time when the online
advertising market is increasingly unpredictable.

But according to Mr. Festa, publishers should think about
the long-term impact those services can have on their sites, and not just the
extra revenue.

Ultimately, LittleThings decided to remove content
recommendation networks from its site entirely, he said, spurred in part by
their use of increasingly “shocking and disturbing images,” which it felt
weren’t suitable alongside its content and drove some users to abandon its
site.

It made a similar decision with so-called “outstream”
video ads, which automatically expand and play in between paragraphs of
articles.

“Our initial belief, like most publishers, was that
outstream provided relatively easy incremental revenue,” Mr. Festa said. But
the company determined that the ads were confusing users and having a detrimental
effect on engagement and sharing rates across the site.

LittleThings believes its experience shows that
publishers don’t need to rely on aggressive ad tactics to make ends meet, and
that they might even be shooting themselves in the foot by including them on
their pages.

“We have proven that publishers can get the most impact
out of every session while maximizing user experience and value to
advertisers,” Mr. Festa said.

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